Key Takeaways
- • TCU endowment CIO Jason Safran, speaking at the Bloomberg Invest Dallas conference, said private equity portfolios were significantly overvalued between 2022 and 2024 and that valuations are now becoming more realistic.
- • Growing investor impatience is pushing managers to accept exits below previously reported valuations or move assets into continuation vehicles, according to Safran's remarks as reported by Bloomberg.
- • Pressure to return capital and generate liquidity from ageing portfolios is driving the shift toward more conservative marks.
- • Olivia Newell of Partners Capital said some managers are adopting more conservative valuation practices, marking assets cautiously to avoid crystallising losses at exit.
- • Many assets were acquired at elevated valuations during the low-interest-rate period, so the normalisation process remains ongoing.
Summary
Private equity managers are increasingly willing to reduce portfolio valuations after several years of inflated asset marks, as pressure to return capital to investors grows, according to a report by Bloomberg. The shift is being driven by investor demands for liquidity rather than by a single discrete market event.
Jason Safran, chief investment officer of Texas Christian University's $3bn endowment, told the Bloomberg Invest Dallas conference that private equity portfolios had been significantly overvalued between 2022 and 2024, but that valuations are now becoming more realistic. Safran reportedly said growing investor impatience is encouraging managers to accept exits below previously reported valuations or to transfer assets into continuation vehicles, reflecting the pressure to generate liquidity from ageing portfolios.
Olivia Newell, managing director and head of Texas at Partners Capital, said some managers have adopted more conservative valuation practices, preferring to mark assets cautiously rather than risk crystallising losses at exit. Her comments underline that the repricing is not yet complete across the industry.
The adjustments come as private equity firms continue to hold investments acquired at elevated valuations during the low-interest-rate period, leaving limb-level exposure to further write-downs and exit pricing risk for allocators with aging vintages.
Jason Safran, chief investment officer of Texas Christian University's $3bn endowment, told the Bloomberg Invest Dallas conference that private equity portfolios had been significantly overvalued between 2022 and 2024, but that valuations are now becoming more realistic. Safran reportedly said growing investor impatience is encouraging managers to accept exits below previously reported valuations or to transfer assets into continuation vehicles, reflecting the pressure to generate liquidity from ageing portfolios.
Olivia Newell, managing director and head of Texas at Partners Capital, said some managers have adopted more conservative valuation practices, preferring to mark assets cautiously rather than risk crystallising losses at exit. Her comments underline that the repricing is not yet complete across the industry.
The adjustments come as private equity firms continue to hold investments acquired at elevated valuations during the low-interest-rate period, leaving limb-level exposure to further write-downs and exit pricing risk for allocators with aging vintages.
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